China's 5-Year Plan Details Released: Country Wants To End Absolute Poverty And Spur Innovation

The details of China’s 13th Five-Year Plan (FYP) have been released to the public, and Credit Suisse analyst Vincent Chan gives a full outline of the plan in a new report this week.

Chan sees two major theme’s in this year’s plan.
“We see two trends: (1) China wants to enhance the role of technologies and innovations to spur growth, and (2) it wishes to bridge the urban-rural gap, eliminate absolute poverty, and push for equal access to public services,” he explains.

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The FYP contains China’s comprehensive path to becoming a moderately prosperous society by 2020.

Chan notes that China has placed more emphasis on the resources and environment section of this year’s plan, indicating that the nation is likely becoming more serious about its air quality and impact on the global environment. He suggests this could be a major area of investment in China in coming years.

Finally, Chan notes that China seems to be increasingly conscious of risk in this year’s plan. He notes that financial regulatory framework reforms were heavily emphasized in the new plan.

So far this year, the iShares FTSE/Xinhua China 25 Index (ETF) FXI is down 4.3 percent while the SPDR S&P 500 ETF Trust SPY is up 0.2 percent.

Disclosure: the authorholds no position in the stocks mentioned.